LEDS Stock: What’s Behind Sudden Rise of Taiwanese SemiLEDs?

Summary

  • SemiLEDs is engaged in manufacturing Light-Emitting Diode (LED) chips and components for general lighting systems.
  • The Taiwanese company has reportedly 4 million outstanding shares and its public float is 2.4 million shares.

Stocks of Taiwanese company SemiLEDs (NASDAQ:LEDS) jumped from US$ 5.5 to US$ 10.22, up by about 86 per cent on Thursday, May 6. However, there was no news from the company that led to this sudden spike and it seems that this was caused by possible coordination through social media platforms.

SemiLEDs manufactures Light-Emitting Diode (LED) chips and components for general lighting systems.

Until recently, LEDS was a penny stock. Over the last few sessions, the stock gained momentum and on May 6, it clocked it’s 52-week-high of US$ 13.44.

In the recent past, many stocks witnessed sudden surge in price after retail investors started discussing about them on social media platforms such as Reddit, Twitter, Twitch and Facebook. According to reports, SemiLEDs stock started rising after its name started surfacing on these platforms.

The Taiwanese company has reportedly 4 million outstanding shares and its public float is 2.4 million shares. Day traders are taking advantage of the low float to drive fluctuations in the stock price.

Here are the recent stock and financial performances of SemiLEDs (NASDAQ:LEDS)

The LED maker is a microcap company with a market cap of C$ 41.5 million and its debt-to-equity (D/E) ratio is 6.28, as per TMX. In a week, the stock has ballooned by 171 per cent and its six-month growth stands at 237 per cent.

In a year, the LEDS stock skyrocketed by 354 per cent and surpassed the NASDAQ Composite Index, which grew by 195 per cent during the same period. Its year-to-date (YTD) growth stands at 185 per cent.

One-year chart of stock performance of SemiLEDs (Source: Refinitiv/Thomson Reuters)

In April, SemiLEDs announced its second-quarter fiscal 2021 results ended February 28, 2021, in which it achieved revenue of US$ 1.2 million, up from US$ 719K in the previous quarter. The company narrowed down its GAAP net loss attributable to shareholders to US$ 255,000 from US$ 697,000 in Q1 2021.

The company’s cash and cash equivalents were US$2.1 million in Q1 2021.

The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view.


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